Day 14 of 100 – What is a Stop-Limit Order?
Today, let’s understand Stop-Limit Orders — a powerful tool in managing risk and automating your trades.
A Stop-Limit Order combines two prices:
1. Stop Price – The trigger price.
2. Limit Price – The price at which your order is placed once the stop is triggered.
Example:
You hold $BTC at $95,000. You want to sell it if the price drops to $94,000, but you don’t want to sell below $93,800.
You set a Stop Price at $94,000.
You set a Limit Price at $93,800.
If $BTC hits $94,000, your sell order goes live at $93,800.
Why use it?
Helps limit losses in a falling market.
You can automate exit points without watching the screen 24/7.
Tomorrow, we’ll break down Stop Market Orders and how they differ.